Dividends4Life: Dividend Stocks Will Boost Your Portfolio

Dividend Stocks Will Boost Your Portfolio

Posted by D4L | Tuesday, October 11, 2011 | | 0 comments »

Markets have been nothing if not turbulent since mid-summer. The S&P 500 is down almost 14% since the start of May, and with debt problems in Europe, there's no telling how long it'll be until we get back to where we were then. But savvy investors who use dividends to buoy their portfolios have slept well despite the turbulence. If anyone had a doubt about the power of dividends, they need only read Jeremy Siegel's The Future for Investors, where he writes: "Dividends matter a lot. Reinvesting dividends is the critical factor giving the edge to most winning stocks in the long run."

But let's be honest, while high dividends and the chance for price appreciation are nice, it means nothing if the company isn't paying out a sustainable dividend. One of the most popular metrics for checking on a dividend payer's sustainability is the earnings payout ratio, which essentially measures the amount of earnings a company dedicates to paying out dividends. As the theory goes, the lower the payout ratio is, the more sustainable the dividend is.

Source: Motley fool

Related Articles:
- My Top 6 Performing Dividend Stocks Just Might Surprise You
- 10 Stocks With Sustainable Dividend Growth
- Income Annuities vs. Dividend Stocks
- 10 Dividend Stocks Delivering A Quick Payback
- Where To Find Great Dividend Stocks

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